Adjudication
Adjudication is the payer’s process of reviewing a submitted claim against the member’s plan and deciding what to pay — approving, adjusting, or denying it.
Updated
Adjudication is what a payer does with a claim after it is received: it checks the claim against the member’s benefits, the provider’s contracted rates, coverage and medical-necessity rules, coding edits, and any authorization requirement, then decides how much — if anything — to pay.
The result is returned to the provider on the remittance advice and to the patient on the explanation of benefits (EOB). Medicare states this as the structure of a single decision reaching two parties: a contractor “makes an initial determination when a claim for Medicare benefits under Part A or Part B is submitted”, and the remittance advice is that determination as sent to the provider.
In practice
Adjudication is where a claim’s upstream quality is tested: accurate eligibility, coding, and authorization tend to adjudicate cleanly, while gaps surface here as reductions or denials carried on standardized reason codes.
Commonly confused with
- Claim submission: Submission sends the claim to the payer; adjudication is the payer’s review and decision on it.
- Payment posting: Posting records the adjudication result on the patient’s account; adjudication is the decision that produces that result.